Data Points to Denmark Win, Claims Microsoft Expert

By Anna Leach

Microsoft’s top minds believe Ms. de Forest will win Eurovision on Saturday.

Forget the sequins. Cold, hard data predicts that Europe will vote for Denmark at the Eurovision song contest on Saturday, says a top researcher at Microsoft.

Using a model designed to predict complex business scenarios, David Rothschild, an economist at Microsoft Research, harnessed powerful computer clusters to work out that Emmelie de Forest’s rendition of “Only Teardrops” will win for Denmark.

By feeding data from bookmakers and social media through computers at Microsoft, Mr. Rothschild puts Denmark far ahead of the competition.

On a real-time ranking for Eurovision 2013 hosted on his blog, Denmark had a 54.7% chance of winning, at the time of writing. Norway was a distant second with 9.8% and Ukraine had a 6.4% chance. The U.K.’s chance of winning was given as 0.7%.

The quantity of data analyzed to get the results is “mind-boggling”, Mr. Rothschild said, because the model combs through all publicly-available information on Facebook, Twitter and YouTube.

What the model does with the data forms the core of Mr. Rothschild’s research work for Microsoft. The model is based on the economic idea of prediction markets — the likelihood of something happening. Mr. Rothschild explains how he used prediction markets to assess data from the bookies offering odds on Eurovision — a classic type of prediction market.

He said: “To put it simply, users in prediction markets trade contracts on upcoming events. If the event occurs, the contract is worth $1 and if it does not occur, it is worth $0. The price that people are willing to trade that contract is collective wisdom of the probability of the event occurring. If it is trading at $0.05, people do not think it will happen, but if it is trading at $0.95 people are nearly certain it will happen. My model collects data from many prediction markets to produce accurate predictions.”

Microsoft Research analyzed Eurovision partly for fun, said Mr. Rothschild, but also because it helps calibrate the product they are working on. His research explores long-term ways to disrupt the multibillion dollar sector of market research and polling. Testing out the model on Eurovision is helpful.

“In Eurovision there’s an outcome, there’s public voting, it’s something that we get to see unfold,” he said, explaining why he chose the event.

“It helps me build universal techniques that are able to answer these types of questions. Through that I’m able to calibrate them, which will really help me move on to more complicated events: business questions or economic indicators, things in which the outcomes aren’t as clear. Predicting the Oscars, Eurovision is a good training ground for that…

“At the end of the day this is all about building very domain-independent techniques for solving the types of questions that we’re interested in.”

And the applications go far beyond European songstresses: “It could be Romney and Obama, it could be Ford and Toyota or Mac and PC. It’s the same thing,” he said.

“The techniques that we’re developing are eventually going to make a massive impact in how we do market research in general.”

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Tech Europe covers Europe’s technology leaders, their companies, and the people and industries that support them — and their ideas. The blog is edited by Ben Rooney, with contributions from The Wall Street Journal and Dow Jones Newswires.